Digital transformation is quite a big topic at the moment – it was the overall theme of Adobe Summit this week, as well as Shift San Francisco in August. So naturally, it was also the theme of the conversation ClickZ had with Mike Brinker, principal of Deloitte Digital, when we met up with him in Las Vegas.

We’ll start with a broad, basic question: what does digital transformation mean to you?

We’re seeing the Internet of Things explode, and virtual reality and augmented reality take off. It’s a whole new way to experience hospitality, TV shows, real estate, marketing. So many new technologies are emerging, but it’s not incremental technology. When it hits, it hits like a ton of bricks and companies are caught off guard like, “What just happened?”

We challenge companies and brands to completely rethink the industry they’re in. Forty percent of the Fortune 500 companies right now will not be here in 10 years. We do believe there’s no industry, no sector and no company that’s immune to this kind of significant disruption.

How did Deloitte come to start Deloitte Digital?

In 2010, mobile, social media, cloud computing and analytics were the four big disruptors. They’re going to be 10 times bigger than dot-com, in terms of disruptors. For us, that meant first going out and making a bunch of key acquisitions.

Deloitte Digital was born in 2010, but it wasn’t until 2011 when we closed the first acquisition and formally launched Deloitte Digital. In 2010, 98 percent of the world didn’t realize what was coming – the world was still using Blackberrys; today, Deloitte has 110,000 iPhones and 67 Blackberrys – but we realized it and said the whole world was going to go mobile.

The first thing we did was launch a responsive site and it was basically just us and The Boston Globe.

We asked Seth Godin this question during a recent video interview, but it fits in here, too, since you keep mentioning disruptors. What do you think is the next industry that’s begging to be disrupted?

There are lots of industries ripe for huge disruption. Everything around media already has; I think retail is the next big one. The fact that Sports Authority just went out of business is an indicator of that. Everything about commerce is going to be realized in a huge way; if retailers don’t transform fast enough, new ones are going to pop up with no cost at scale.

Cars are another one. A Tesla has more in common with my iPhone than a combustible engine carburetor. Automotive companies aren’t ready for that, but that’s what cars are becoming.

But it doesn’t have to be this amazing media business. We’re working with a company that’s rethinking the way they do waste management, with sensors in the trash cans, both commercial and residential. They can skip routes or notify people to take out the trash or have the ability to Uber a truck to get rid of a sofa. That’s trash; it doesn’t only happen with the Nikes of the world.

Amazon is winning, not because of technology or its website. They’re beating everyone because of a few key considerations: price. Availability: they have an endless aisle. Loyalty: Amazon Prime has created loyalty like never before. Now, the war is over shipping and logistics.

Amazon is disrupting the space with traditional business practices, tried and true back-office operations. In 10 years, the world is going to be set up for digital-physical. Think about connected computing devices. In 2010, we had 500 million, which seems like a lot but today, we have 20 billion. By 2020, we’ll have about 75 billion and by 2030, 1 trillion. We’re not even skimming the surface.

Where do you see this convergence going?

We’re creating completely new markets and ways of doing things where digital and physical are going to collide. Every physical device will have digital device embedded in it. Think about a hot water heater. It has one job and it doesn’t even tell you the temperature. [What would make that possible] would be like $6 worth of technology. Why don’t they all have them?

It’s going to be a nirvana for marketers. From a marketing perspective, there’s endless places you can go with it. Technology is getting so cheap that you can put it in every pizza you deliver and you could use that for loyalty programs.

Of all the brands you’ve worked with, which one had the coolest example of merging physical and digital?

The Store of the Future we helped execute for Telstra in Australia. It’s like a Verizon or an AT&T, but bigger: they own 70 percent of the market down there.

When you walk in, you get handed a chip and you can use this to scan, highlight and compare things in real-time or later, if you want to go home and punch in the code from the chip. You don’t even have to use your phone because you might not have one; you might be shopping for one.

What’s one takeaway our readers can pull from this?

Make a really delightful experience. Make very complex products simple and delight the customer around the ease of the transaction.

It’s about taking the friction out and making everything so easy and seamless in physical and digital. That’s what truly matters.

Mike O'Brien is US Editor at ClickZ

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